Lloyds syndicates RJ Wallace and Abacus suspended writing new business last week because of a lack of capacity.
Abacus has stopped writing all new business and RJ Wallace has ceased writing new UK ...
Lloyds syndicates RJ Wallace and Abacus suspended writing new business last week because of a lack of capacity.
Abacus has stopped writing all new business and RJ Wallace has ceased writing new UK business for employers' liability (EL) and public liability (PL) from its Syndicate 386.
Chief underwriter for Abacus John Murphy said the company is reassessing its books and looking to see what impact the quotes put out will have in the market. He said the moratorium should be lifted by June or July.
Active underwriter for RJ Wallace Bob Wallace said: "Until we satisfy ourselves that we have proper control, we will not write new business. We are still, however, renewing old business."
This follows industry concerns voiced by Howell Shone Insurance Broker partner Tim Green. He said insurers are throwing out risks and it is now difficult to get business placed.
"Capacity problems have been a theoretical problem for a while but are now beginning to bite on the ground," he said.
"Capacity needs to come back into the market. On the ground, things are getting quite serious for provincial brokers handling commercial cases with claims experience, or what is assumed to be high hazard occupations, for example roofing contractors."
Andrew Holman, chief executive of Lloyd's broker Holman, agreed that liability is impossible to place in some cases.
He said businesses have two options if they cannot get cover - either fold or trade illegally. He added that premiums have gone up so much that the situation is making a significant impact on the fixed costs of companies.
Wallace confirmed premium rates have increased for UK business at
RJ Wallace by between 25% and 50%, but for businesses that have bad claims records, the increase is significantly more.
"It's not necessarily a bad thing because it forces a greater degree of risk selection on underwriters," he said.
Murphy said premiums have gone up substantially at Abacus and in some instances, have shot up 300% for risks, which have performed badly.
